bitcoin-schweiz.ch · Spekulationstechniken und Anwendung von Internet-Plattformen, ... Criminals (Darknet, Silkroad ... About 1 million times more work per second than a

. bitcoin-schweiz.ch .Bitcoin-Grundlagenseminar, Dienstag 24.10.2017

Funktionsweise von Blockchain und Bitcoin

Bitcoin-Anwenderseminar, Dienstag, 31. Oktober 2017

Bitcoin annehmen, weiterleiten und aufbewahren.

Die konkrete Anwendung verschiedener Apps, Sicherheitsaspekte Hinweis auf häufige Fehler

Spekulation mit Bitcoin und weiteren KryptowährungenDienstag, 7. November 2017

Grundsätze der Spekulation mit Bitcoin, Handel mit Limiten

Spekulationstechniken und Anwendung von Internet-Plattformen,Aufbewahrung und eingeschränkte Verfügung von Bitcoin

© bitcoin-schweiz.ch

. bitcoin-schweiz.ch .Bitcoin-Grundlagenseminar, Dienstag 24.10.2017

Funktionsweise von Blockchain und Bitcoin

Terminologie

Definition Bitcoin / Blockchain / Key / Wallets / Transactions Bitcoin Network, Mining, Live Demonstration

Ideologie, Vorteile

Starterkit© bitcoin-schweiz.ch

. bitcoin-schweiz.ch .Terminologie, Zeichen, Logo

Key Schlüssel Adresse

Wallet Geldbörse Schlüsselbund

BTC XBT

฿

Ƀ© bitcoin-schweiz.ch

A Brief Introduction to Bitcoin and Blockchain

The Revolution Will Not Be Centralized

Walter Dey, Dr. sc. [email protected]

+41 79 301 84 37


mailto:[email protected]

Agenda

• Bitcoin / Blockchain: Economic / Social / Technical

• We will cover the following technical topics• What is Bitcoin / Blockchain

• Public Key Cryptography and Addresses

• Wallets

• Transactions

• Bitcoin Network

• Mining

• Live Demonstration

• Conclusion


Bitcoin is the first Cryptocurrency

Which Bitcoin ?

http://btcgpu.org/ © bitcoin-schweiz.ch

▶ Introduced conceptionally in 2008 in a white paper *) (Finance Crisis !)

▶ Network launches in 2009

▶ Business Case / Motivation

▶ Remittance Market (Western Union, PayPal,….)

▶ 2.5 Billions of unbanked people **)

▶ Bypass any Regulations (Governments, Finance Industry)

▶ Today mainly war of currencies (India, Venezuela, China, SA,….)

▶ …..

▶ Not to forget: Criminals (Darknet, Silkroad,….)

History

*) https://bitcoin.org/bitcoin.pdf**) https://bravenewcoin.com/news/banking-the-unbanked-catalyst-for-bitcoins-mass-adoption/

https://bitcoin.org/bitcoin.pdf

https://bravenewcoin.com/news/banking-the-unbanked-catalyst-for-bitcoins-mass-adoption/

Bitcoin is dead ? Bubble ?


Bitcoin Bubble, Scam,….. !?! ☺ ☺ ☺

https://99bitcoins.com/bitcoinobituaries/

▶ Internet of Information

▶ TCP/IP = communication protocol

▶ Foundation of "Information Data Highway"

▶ 1st use case: email

▶ Internet of Value

▶ Blockchain = Value Exchange Protocol *) **)

▶ Decentralizing Trust

▶ 1st use case: Bitcoin

Blockchain / Bitcoin = Internet of Value

*) not to be confused with Private Blockchains**) Each cryptocurrency (eg. Ethereum, Litecoin) has it’s own blockchain

Bitcoin is

▶ A technology

▶ A protocol

▶ A network (the worlds largest distributed coming project)

▶ A currency (coins, tokens)

▶ A trusted ledger to record and manage the chain of title

▶ Settlement with a high degree of certainty

▶ The Bitcoin (payment system) is a public distributed peer-to-peer ledger

used to transfer the ownership of bitcoins (the currency)

▶ Each Transaction on the blockchain is verified by all nodes in the network.

▶ If the majority of the network agree that a certain transaction is true, it is

validated and a new Block is created and added on the top of the chain.

▶ Payments are sent between wallets, exchanges, and machine services with

basically no fees

▶ Blockchain replaces the trusted 3rd party

Bitcoin Basics

Bitcoin is NOT

▶ A company

▶ Centrally controlled

▶ Proprietary

▶ Localized or bound by jurisdictions in the conventional sense

Bitcoin Basics

The Blockchain / Bitcoin Ecosystem

Exchange (e.g. Bity Neuchatel, Kraken, SBB)

AML: ANTI-MONEY LAUNDERING KYC: KNOW YOUR CUSTOMER

Bitcoin am ATM kaufen1) Paper-wallet: private key importieren auf persönliches Wallet 2) QR Code public-address zum aufladen und abfragen

Geduld ===============================


Wallet (eg. Bitcoin Full Node)


Wallets

• Software Wallet-> Desktop (Electrum, Exodus), Mobile (Bread), Online (Blockchain.info)

• Hardware Wallet(Ledger Nano S, Trezor, KeepKey)

• Paper Wallet

• Hot (connected via Internet to Blockchain)

• Cold (isolated)


Wallet Storage (Private / Public Key’s)

Cold Storage Devices

Which Wallet

• Mobile or static (Desktop, Hardware, Paper)

• Multicurrency or single use (Bitcoin)

• Private key under local control (Desktop, Hardware, Paper, Mobile) orexternal (Online)


Seed Creation / Recovery with Seed

• During the installation of each HD or Hardware Wallet a 12 or 24 word Seed gets created. (words from a 2048 dictionary)

• Seed also used for recovery


Master Private Key derived from Seed


Public key cryptography, or asymmetrical cryptography


Private / Public Key, Hash(SHA-256) and Bitcoin Address

Probability of Duplicated Bitcoin Address

• Example of 1 billion (Deutsch=Milliarde) users have 10 addresses each:• 1FJe4vovr5p53nutPL4YLo4FZfzFpojtaY• There are 2^160 or about

1,460,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000 possible addresses

• In your scenario, 1,000,000,000 people are using 10 addresses each for a total of 10,000,000,000 possible addresses

• 10,000,000,000 / 2^160 should yield the probability of a collision occurring10,000,000,000 / 2^160 = 0.00000000000000000000000000000000000000684

• So the chances of a collision occurring in our scenario are approximately 0.000000000000000000000000000000000000684%


Bitcoin Transactions


http://blockchain.info Real Time View of Transactions

https://bitnodes.21.co/

Blockchain Network *) = Peer to Peer

*) “Mastering Bitcoin: Unlocking Digital Cryptocurrencies” Andreas M. Antonopoulos

▶ Network maintained by "Miners" who are rewarded to verifying transactions with newly

released coins (Role of central bank, replaces central bank)

▶ Miner gets block fee and transaction fees (for transactions in a block)

▶ Regulated by mathematics (PoW=proof of work)

Bitcoin Advanced

Mining

http://www.blockchaintechnologies.com/blockchain-mining#bitcoin-mining

A normal CPU can mine SHA256 at around 5–10 MH/s. An ASIC can mine SHA256 at around 5–10 TH/s, or About 1 million times more work per second than a CPU can.

Target Value: 00000000000000000072……………

▶ Bitcoin Blocktime : 1 Block / 10 minutes or 144 blocks / day

▶ Coins released predictably (max. 21 million BTC, deflationary)

▶ Today 16 million BTC in circulation

▶ Block fee: Released every 10 minutes

▶ 2009-2013 50 BTC, 2013-2016 25 BTC, since 2016 12.5 BTC

▶ 2140: all available 21 million blocks are in circulation

▶ Secured cryptographically (Digital signature, Public/Private keys, 256 Bit Hash)

▶ Easy to divide and recombine (smallest unit = 1 Satoshi = 0.00000001 BTC, or 1 BTC =

100’000’000 Satoshi)

▶ It cannot be counterfeited (double spend protection; Immutability=transactions are

irreversible)

▶ Bitcoin is not anonymous, but, rather, pseudo-anonymous.

▶ It can be sent anywhere in the world (primarily over internet), instantly, at near zero cost

Bitcoin Advanced (cont)

Blockchain (simplified view)

https://blockexplorer.com/blocks

https://tradeblock.com/bitcoin/

One Block Forks, happens daily !

Chain Reconvergence !

Hard Fork (eg. Bitcoin -> Bcash or Bitcoin -> Bgold)

▶ Notarization

▶ Land Registration

▶ Asset Management

▶ Proof of existence

▶ Digital identity

▶ Securities

▶ Loyalty Points

▶ Energy credits

▶ Votes

▶ .....

New Applications using Blockchain

Gartner Hype Cycle 2017

http://www.gartner.com/smarterwithgartner/top-trends-in-the-gartner-hype-cycle-for-emerging-technologies-2017/© bitcoin-schweiz.ch

Gartner Hype Cycle 2017 (cont)

• Digital Platforms• With bitcoin and Ethereum constantly in the news, blockchain might seem

like it’s just around the corner. However, most initiatives are still in alpha or beta stage. Enterprises are still deciding how to navigate this technology, but the lack of proven use cases and the volatility of bitcoin have created concerns about the viability of the technology. Long-term, Gartner believes this technology will lead to a reformation of whole industries.

• Of the two types of blockchain — permissionless-public ledgers and permissioned-public ledgers — enterprises should look toward the latter option. Permissioned-public ledgers have access controls owned/managed by rules, but still allow for a community. For commercial transactions, companies might look to permissionless-public ledgers such as bitcoin, which allows unknown or untrusted users to access the ledger.

http://www.gartner.com/smarterwithgartner/are-you-ready-for-blockchain-infographic/© bitcoin-schweiz.ch

http://www.gartner.com/smarterwithgartner/the-cios-guide-to-blockchain/

Blockchain and Bitcoin are disruptive

https://www.youtube.com/watch?v=Z0niGKbPBHA

https://www.youtube.com/watch?v=Z0niGKbPBHA

Blockchain and Bitcoin are disruptive

Live Demonstration (BTC Transfer 16’600 km)


Conclusion

• Bitcoin: Store of value -> Buy and Hold -> it’s not too late

• Bitcoin: Money Transfer

• Bitcoin: Buying goods and services

• Cryptocurrency in general: Huge job opportunities !


. bitcoin-schweiz.ch .Nehmen Sie vor dem nach Hause gehen ihr Starterkit mit !


. bitcoin-schweiz.ch .

. Blog und E-Mail an Walter Dey ([email protected])

und Jürg Kradolfer (jü[email protected]).

Addendum


▶ http://coinmarketcap.com

▶ https://bity.com/

▶ https://bitnodes.21.co/

▶ https://blockchain.info

▶ http://gugger.guru/blockchain-demo/

▶ https://tradeblock.com/bitcoin/

▶ https://blockexplorer.com/blocks

Useful URL’s

http://coinmarketcap.com/

https://bity.com/

https://bitnodes.21.co/

https://blockchain.info/

http://gugger.guru/blockchain-demo/

https://tradeblock.com/bitcoin/

https://blockexplorer.com/blocks

Documents

bitcoin-schweiz.ch · Spekulationstechniken und Anwendung von Internet-Plattformen, ... Criminals (Darknet, Silkroad ... About 1 million times more work per second than a